The Financial Services Agency (FSA) will scrap its Inspection Bureau as part of internal restructuring, it was learned on Aug. 21.

Under the new restructuring, the FSA aims to reassign the Inspection Bureau's current responsibilities to other divisions. Specifically, the Supervisory Bureau is expected to take over the role of checking operations of individual financial institutions while a new bureau will oversee sophisticated tasks such as cracking down on cyberterrorism.

In addition, another new bureau will be established by reorganizing and strengthening the current Planning and Coordination Bureau, which has been responsible for matters such as banking system reform.

With the restructuring scheduled to take place in July 2018, the FSA will include its budget requests for the plan within an all-encompassing request for fiscal 2018 that will be submitted by the end of August 2017.

This is the first time for the FSA to undergo major restructuring since its inauguration in 2000. In the first half of the decade since then, the Inspection Bureau was responsible for tasks such as stringent asset evaluation and for speeding up the writing off of bad debts. However, with the progress of information technology (IT) altering the landscape of the financial sector, the FSA has decided to restructure to keep up with the times.

The new division that will effectively replace the Inspection Bureau is expected to consist of a sophisticated team that will crack down on cyberterrorism and money laundering. The FSA also plans to have a specialist team that will analyze the economy, and it aims to strengthen its capability to analyze overall risk within the financial system, and to reinforce its monitoring system.

Meanwhile, the second new division will be a strengthened version of the current Planning and Coordination Bureau, working on "fintech" that involves the use of cutting-edge IT in the provision of financial services, and designing policies relating to the financial market in Japan, aimed toward promoting the conversion of "savings to investments."